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Rachel Reeves said that she and Sir keir starmer They had decided “as a team” not to raise income tax as they had hit out at “too many leaks” ahead of the Budget.
chancellor Told MPs that he and he have a “very close partnership” Prime Minister This meant that the move to increase the tax threshold limit was taken jointly.
It came as a senior treasure The official confirmed an investigation into leaked economic policy reports that emerged ahead of Ms Reeves’ statement in the Commons will involve ministers as well as civil servants and advisers.
appear before parliament treasury select committeeThe Chancellor said a story in the Financial Times revealing he had abandoned plans for an income tax rise was “incredibly damaging”.
He said, “This was not an off-the-record briefing, this was a leak. I am absolutely clear that that was not an authorized briefing.”
He said the report was “disappointing” because it gave the impression that he had abandoned his commitment to rebuild “headroom” against his rule of balancing day-to-day spending with tax receipts.
In the weeks before the Budget, the Chancellor herself fueled speculation of preparations to raise income tax in a speech which sought to set the pitch for the autumn statement by warning of difficult decisions ahead.
He suggested that sticking to Labour’s pre-election promises, which included a pledge not to raise income tax, would only be possible with “deep cuts” in public investment.
A leak to the Financial Times later revealed that a proposal to raise income tax rates for the first time in 50 years had been dropped.
Speaking on Wednesday, Ms Reeves said: “There was too much speculation in the Budget. There were too many leaks, and most of them, those leaks and speculations were wrong, very damaging, as well as IT security issues… The OBR report also said the spring statement was also accessed early.
“I want to say on the record how disappointed I am and have been by these events and the amount of speculation and leaks, and that is why I am doing something about it, because we cannot allow this to happen again.
“With my full support, a leaks investigation is underway, led by the Permanent Secretary to the Treasury, and we are also reviewing Treasury security procedures to inform future financial incidents.”
Appearing alongside Ms Reeves, Permanent Secretary to the Treasury James Bowler confirmed the leak inquiry would include ministers as well as officials and advisers.
Asked whether the Prime Minister had decided not to raise income tax, Ms Reeves said she had met Sir Keir “two, three times a week during the budget process”.
“That’s not always the case between chancellors and prime ministers. I recognize that. But I and the prime minister have a very close partnership,” she said.
“And so we told them all the numbers and all the options and we made the decision together as a team, because that’s who the Prime Minister and I are.”
Former OBR chairman Richard Hughes resigned after the watchdog’s assessment of the Chancellor’s plans was inadvertently made available online before he gave his speech last month.
Meanwhile, Ms Reeves faced accusations of misleading the public about the state of the public finances after a letter from the OBR contradicted her statement that she needed to raise taxes to plug the so-called “black hole”.
Instead the OBR’s pre-Budget forecast suggested Ms Reeves’ spending plans would run in surplus due to changing economic conditions.
In a Tory-led debate in the Commons on Wednesday afternoon, the party will use a parliamentary procedure known as a censure motion to ask Ms Reeves to apologize for the budget developments.
Addressing the Treasury committee, Ms Reeves said a lot of information had been shared between the OBR and the Treasury in the weeks leading up to the autumn statement.
“Pre-measures are not the final word from the Office of Budget Responsibility, because then you have post-measures forecasts,” he told MPs.
“They take into account the policy decisions that we take as a government on tax and spending… so there was a lot of additional information being shared between the OBR and the Treasury between October 30 and key measures one and indeed key measures two.”
Later, ahead of the Conservative-led debate, Shadow Chancellor Sir Mel Stride accused Ms Reeves of putting “party before country”.
He said: “Rachel Reeves has repeatedly misled the British public. She promised she wouldn’t raise taxes on working people – and then she did. She insisted there was a black hole in the public finances – and there wasn’t.”